APPENDIX C.-Honorable Richard L. Thornburgh, Letter Dated April 22, 1991, From Chairman J.J. Pickle, Subcommittee on Oversight, Committee on Ways and Means As you are aware, the Subcommittee on Oversight of the Committee on Ways and Means is currently investigating the administration and enforcement of U.S. export controls by the U.S. Customs Service. The Subcommittee held the first of two hearings on April 18, 1991. During the course of that hearing, it became apparent that to properly complete the Subcommittee's investigation, the Subcommittee would need to examine the Department of Justice's role in export control enforcement. Therefore, I request your presence, or that of your designee, at the Subcommittee's hearing on Wednesday, May 1, 1991, in room 1100 Longworth House Office Building, beginning at 9:30 a.m. Department of Justice's Office of Congressional Affairs was advised of this request on Friday, April 19, 1991 The In addition to presenting a general statement of the Department of Justice's role in export control enforcement, the Subcommittee Members would be particularly interested in hearing exactly what Justice's role was in the four cases examined by the Subcommittee on April 18, 1991: the Helmy case; the Alcolac case; the Global Helicopter case; and, the C-TEK case. If you have any questions regarding these cases or what transpired at the Subcommittee's hearing on April 18, please contact Beth Vance, Staff Director, or Thomas K. Arnold, Assistant Counsel for Investigations, at 225-5522. Pursuant to Committee rules, please deliver 150 copies of Sincerely, Dickle Pickle, Chairman JJP/tal APPENDIX D.-U.S. Department of Justice, Letter Dated April 25, 1991, From W. Lee Rawls, Assistant Attorney General, Office of Legislative Affairs Thank you very much for your letter of April 22, 1991, requesting that the Department provide a witness for your May 1, 1991, hearing on the administration and enforcement of U.S. export control by the U.S. Customs Service. Regrettably, the Department must respectfully decline the invitation for that date and request that the Department of Justice's participation be delayed until the period of May 13th to May 16th, inclusive. As you are aware from your hearing of April 18, 1991, the four cases about which you received testimony (the Helmy, Alcolac, Global Helicopter and C-TEK cases) were handled in several jurisdictions around the country. To properly prepare the Department's representative, therefore, the Department must retrieve and review the files from those offices, including any classified materials contained therein, and consult with a variety of officials. Similarly, in order to be prepared to respond to issues raised in your April 18th hearing, we will want to review the transcript of that hearing, which we have not yet received. We look forward to working with you and your staff to prepare for this hearing. Sincerely W. See Rauls W. Lee Rawls Assistant Attorney General APPENDIX E.-U.S. Department of Justice, Letter Dated May 24, 1991, From W. Lee Rawls, Assistant Attorney General, Office of Legislative Affairs This is in response to the request of Subcommittee for the views of the Department of Justice on whether there is a need for any legislative change in the area of export controls. Moreover, the Subcommittee requested our response to certain questions relating to United States v. Abdelkader Helmy, et al., a case involving the unlawful export of missile parts and components to Egypt in 1988. Finally, for our information and comment, the Subcommittee forwarded correspondence and testimony it has received from current and former Assistant United States Attorneys relating to several other cases the Subcommittee has reviewed during the course of the hearings. By way of background, it may be beneficial for the Subcommittee to understand the Department's role in the enforcement of the export control laws. The Internal Security Section of the Criminal Division has oversight responsibility for cases developed under the Arms Export Control Act, 22 U.S.C. § 2778, the Export Administration Act, 50 U.S.C. app. SS 2401, et seq., and the International Emergency Economic Powers Act, 50 U.S.C. SS 1701, et seq., the Trading with the Enemy Act, 50 U.S.c. app. SS 1, et seq., and related statutes. Over the years, the Internal Security Section has supervised a number of significant cases under these acts. In August of 1982, the Criminal Division established the Export Control Enforcement Unit in the Internal Security Section. This unit has general oversight responsibility for the development and prosecution of cases under the export control -2 laws. Attorneys in the unit work closely with the investigative agencies and the United States Attorneys' offices to develop and prosecute export control cases. Over the years, the Department has assigned a high priority to export control cases, and the United States Attorneys and the Criminal Division have vigorously pursued such cases, and will continue to do so. In addition to our case work, the Criminal Division and other offices in the Department work on interagency committees which address a broad spectrum of issues relating to export control issues. Justice and the State Department have taken technology transfer and export control issues into consideration in setting priorities for the negotiation of treaties on extradition and mutual assistance in criminal matters and in assuring, to the extent possible, that such treaties and agreements encompass export control offenses. Our Office of International Affairs works closely with the United States Attorneys' offices on the extradition of fugitives and on obtaining evidence from foreign countries. As you are aware, during the last ten years all agencies have significantly upgraded and revitalized our export control enforcement program. In 1981, the Customs Service initiated a national enforcement program, called "Operation Exodus", to prevent the illegal export of military and strategic technology to the Soviet Union and other proscribed destinations. During that period, the Commerce Department increased its resources in this area and opened new field offices. These enforcement programs are in place today, and the fine work of the Customs and Commerce Agents has resulted in significant prosecutions which protect vital national security and foreign policy interests of the United States. Since 1981, the Internal Security Section has worked with the investigative agencies and the United States Attorneys' offices on approximately 260 export control cases in which over 750 defendants have been prosecuted. The Federal Bureau of Investigation also plays a vital role in the export control area. As a member of the intelligence community, it develops intelligence which supports our law enforcement efforts. Although Customs and Commerce investigate violations of various export control laws, foreign counterintelligence investigations and other criminal investigations by the FBI can also uncover such violations. this occurs, the FBI may continue the export control investigation or refer the matter to Customs or Commerce. When In addition, the FBI conducts a program to develop public awareness of the real threat posed by hostile intelligence -3 services. This program, called DECA, Development of Counterintelligence Awareness, is directed at defense-related companies involved in classified work. There are currently over 11,000 of these companies. The DECA program seeks to alert each company's management and security personnel to the threat posed by hostile intelligence services. With regard to the area of new legislation in the export control area, on March 11, 1991, the President transmitted to Congress comprehensive legislation which subsequently was introduced in Congress as the Comprehensive Violent Crime Control Act of 1991, Senate Bill 635 and House Bill 1400. This legislation includes several provisions relating to the export control area. Section 737, Enhanced Penalties For Certain Offenses, provides for increased penalties for violations of the International Emergency Economic Powers Act (IEEPA), 50 U.S.C. SS 1701, et seq. Specifically, the Bill increases the current maximum criminal fine from $50,000 to $1,000,000. Moreover, the Bill increases the current maximum civil fine from $10,000 to $1,000,000. For As the Subcommittee is aware, the maximum amount of the fines under a criminal statute has a direct bearing on the amount of fine a court may impose under the sentencing guidelines. example, if the statutory fine is raised above the level of $250,000, the sentencing guidelines provide that the sentencing guideline maximum, which could be as low as $40,000 depending on the nature of the offense, is not controlling and the Court is permitted to impose the statutory fine. In short, the sentencing guidelines can limit the amount of the fine imposed, and therefore, it is essential that export control offenses have substantial fine penalties above the sentencing guideline maximums. Section 745, Authorization for Interceptions of Communications, adds additional crimes to the list of Title III predicate offenses (18 U.S.C. 2516(1)(k)) for interception of wire, oral and electronic communications. The offenses added include violations of the Export Administration Act, the International Emergency Economic Powers Act, the Trading with the Enemy Act, the Neutrality Act and other statutes. In recommending this legislation, we noted that the Arms Export Control Act is currently a Title III predicate offense. Section 746 and 747 would also greatly enhance the effectiveness of Title III wiretaps in export control investigations. The statutory comment accompanying the Bills provides as follows: |